Defined methods to grow replicative cultures of normal human bronchial epithelial (NHBE) cells without serum have been developed. These cells can be subcultured several times; will undergo 35 population doublings; and have expected epithelial cell characteristics of keratin, desmosomes, and blood group antigens on their cell surface. NHBE cells inoculated at clonal density will multiply with an average generation time of 28 hr; the majority of the cells are small and migratory and have few tonofilaments. An autocrine growth factor was detected by measuring the growth rate as a function of cell density. This factor may be interleukin 1, since interleukin 1 was detected by immunoperoxidase staining, and highly purified interleukin 1 was found to increase the clonal growth rate. An unidentified autocrine squamous differentiation-inducing factor was also detected. Adding human blood-derived serum (BDS) depresses the clonal growth rate of NHBE cells in a dose-dependent fashion. In contrast, 10 representative lines of human lung carcinomas either replicate poorly or fail to grow at all when inoculated at clonal density in serum-free medium; their rates of multiplication increase in direct proportion to the amount of BDS added to the optimized medium. BDS reduces the clonal growth rate of NHBE cells by specifically inducing squamos differentiation. The differentiation-inducing activity was not present in plasma but was found in platelet lysates. An assay system based upon morphometric measurement of cell area by image analysis was developed to quantify fractionated BDS; differentiation-inducing activity was found to be approximately 50K daltons.